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INDIA - 2025/07/10: In this photo illustration, a Royal Gold INC logo is seen displayed on a smartphone and in the background. (Photo Illustration by Avishek Das/SOPA Images/LightRocket via Getty Images) SOPA Images/LightRocket via Getty Images Royal Gold (NASDAQ: RGLD) stock may be a promising choice to capitalize on the momentum. Why? Because it offers strong margins, a low-debt capital structure, and strong momentum. Here are some key figures. Revenue Growth: Royal Gold experienced a revenue increase of 30.1% LTM and an 8.2% average over the last three years. Long-Term Profitability: Approximately 70.7% operating cash flow margin and a 55.4% operating margin averaged over the last three years. Strong Momentum: Currently positioned in the top 10 percentile of stocks based on our proprietary metric for "trend strength." Room To Run: Despite its momentum, RGLD stock is currently trading 13% lower than its 52-week peak. While revenue growth is beneficial, this selection is centered around harnessing momentum with quality – evaluated through margins (indicating pricing power / robust business model) and capital structure (not overly reliant on debt). For some context, Royal Gold manages precious metal streams and royalties, overseeing interests in 187 global properties spanning five continents, including the U.S., Canada, Chile, Australia, Africa, and Mexico. Royal Gold stock tends to move closely with gold prices, given that its revenues are largely tied to royalty and streaming contracts based on the metal’s production and price levels. After a period of consolidation in gold prices amid easing inflation and stronger U.S. dollar trends, any rebound in gold—driven by renewed safe-haven demand, potential rate cuts, or geopolitical uncertainty—could provide a meaningful tailwind for RGLD. Since Royal Gold benefits directly from higher realized gold prices without bearing the operating costs of mining, even a moderate recovery in gold could translate into outsized cash flow and margin gains for the company. With physical gold showing signs of resilience and macro conditions turning more supportive for precious metals, RGLD may be well-positioned for an upswing alongside a broader gold price rebound. Key Metrics MORE FOR YOU But do these figures convey the entire narrative? Check Buy or Sell RGLD Stock to determine if Royal Gold retains a competitive advantage that stands up under scrutiny. Stock picking often leads to disappointing results. High Quality Portfolio transforms insights from individual stocks into a solid market-beating portfolio strategy. Stocks Like These Can Outperform. Here Is Data Here is the selection process: We focus on stocks with a market cap exceeding $2 billion, high operating and cash flow (CFO) margins, no significant revenue declines in the last 5 years, a low-debt capital structure, and strong momentum as defined by our proprietary metric. Below are statistics for stocks that adhered to this selection strategy between 12/31/2016 and 6/30/2025. Average forward returns of nearly 15% over 12 months Win rate of around 60% for picks returning positive over 12 months But Consider The Risk However, RGLD is not exempt from significant drops. The stock declined almost 60% during the Dot-Com Bubble, 42% amid the Global Financial Crisis, and approximately 41% during the inflation shock. Even minor sell-offs, such as those in 2018 and the Covid pandemic, saw declines of 25% and 43%, respectively. Thus, while the stock boasts solid fundamentals, it can still experience downturns when the market falters. The risk, however, is not confined to major market crashes. Stocks can decline even when markets are performing well – consider events such as earnings releases, business updates, and outlook revisions. Read RGLD Dip Buyer Analyses to understand how the stock has rebounded from sharp declines in the past. The Trefis High Quality (HQ) Portfolio, consisting of 30 stocks, has a proven track record of consistently outperforming its benchmark, which includes all three indices – the S&P 500, S&P mid-cap, and Russell 2000. What is the reason? As a collective, HQ Portfolio stocks have delivered superior returns with reduced risk compared to the benchmark index; resulting in a smoother ride, as illustrated in HQ Portfolio performance metrics. Editorial StandardsReprints & Permissions
